08 July 2016, Sweetcrude, Lagos — Local and international financial market products and services update.NIGERIA: The Nigerian National Petroleum Corporation (NNPC), the state-run oil firm finally turned the corner, reporting an operating profit of N273.74 million for the month of May and reversing the losses of N35 billion made by NNPC over the last 15 years.
A copy of NNPC’s monthly financial and operations management report showed that the corporation’s N273.74 million operating profit in May 2016 as against its operating loss of N19.43 billion in April was attributed to improved cost efficiency at the corporate headquarters of NNPC and performance by the Petroleum Products Marketing Company (PPMC).
The monthly report stated: “PPMC recorded a net gain of N17.69 billion as against the net loss of N6.91 billion in April, 2016 following complete stoppage of commercially unfavorable swaps and offshore processing agreements (OPAs).

FX: The closing Indicative range for Monday’s trading session was $/NGN 282.25 – $/NGN 283.00. Interbank activities to resume today after the Eid Holidays.
FIXED INCOME: There was a correction in the bond space on Monday as expected (average yield went up by 35bps). The reality of more supply from the last auction and no evident offshore demand for bonds triggered the selloff. Bond yields are now back to where we were before the rally – 14% handle. T-Bill market had opened bullish but reversed some of the gains before close on Monday.

U.S: U.S. job growth likely rebounded in June as striking Verizon (VZ.N) employees returned to work and wages probably rose steadily, more evidence the economy has regained speed after a first-quarter lull.
The U.S. Labor Department’s jobs tally due today is likely to show nonfarm payrolls increased by 175,000 jobs last month after a meager 38,000 gain in May, according to a Reuters survey of economists. The unemployment rate is forecast rising to 4.8% from an 8-1/2-year low of 4.7% a month earlier as some job seekers returned to the labor market.
The signs of economic strength would be welcomed by the Federal Reserve. Nonetheless, economists say the report will likely have little impact on the near-term interest rate outlook given the U.S. central bank’s desire to wait on more data to assess the economic impact of Britain’s stunning vote last month to leave the European Union.

E.U: Spain and Portugal were hit by a European Union move to fine them for breaching budget deficit limits in an unprecedented step to enforce rules designed to avert another debt crisis.
European finance ministers must now decide whether to back the proposal by the European Commission. Should the recommendation be approved, the commission would have 20 days to propose fines that could reach as high as 0.2% of gross domestic product, and a suspension of some regional funds. The penalties could be reduced or canceled for “exceptional” circumstances.

COMMODITIES: Oil trimmed its biggest weekly decline in five months as investors weighed the largest drop in U.S. output since 2013 against a smaller-than-expected stockpile decline.
Futures rose as much as 1.4% in New York. Prices lost 4.8% Thursday after government data showed crude stockpiles fell 2.2 million barrels last week, less than the forecast 2.5 million barrel decline and the 6.7 million drop reported by the industry-funded American Petroleum Institute. U.S. production slumped 194,000 barrels a day, or 2.3%.